India’s extreme poverty rate fell to 2.6% in 2023 from 27.1% in 2011, according to the World Bank. While 496 million people moved above the poverty line, income inequality persists. The World Bank said, "Wage disparities, however, remain pronounced, as median earnings among the top 10 percent were 13 times higher."
India's extreme poverty rate fell sharply to 2.6% in 2023 from 27.1% in 2011, with an estimated 496 million people moving above the lower-middle-income poverty line over the same period, according to the World Bank.
However, despite the substantial reduction in poverty, the gap between the country's highest-paid and lowest-paid workers remains wide, with the top 10% earning around 13 times more than the bottom 10%.
In its October 2026 Poverty & Equity Brief, the World Bank said the share of India's population living below the lower-middle-income poverty line of $4.20 a day fell from 57.7% in 2011 to 16.1% in 2023. Extreme poverty, measured using the $3-a-day line, declined from 27.1% t
o 2.6% during the same period.
The World Bank also reported India's Gini index at 23.0 in 2023, a measure of how evenly or unevenly income or consumption is distributed across the population.
"Wage disparities, however, remain pronounced, as median earnings among the top 10 percent of workers were about 13 times those of the bottom 10 percent in 2023," the World Bank said.
EXTREME POVERTY FALLS TO 2.6%
The decline in extreme poverty means that a much smaller share of India's population was living below the $3-a-day threshold in 2023 compared with 2011.
The World Bank uses the $3-a-day line to measure extreme poverty, while the $4.20-a-day line is its benchmark for poverty in lower-middle-income countries. Both thresholds are based on 2021 purchasing power parity (PPP), which adjusts for differences in the cost of living.
The share of people living below the $4.20-a-day line fell from 57.7% to 16.1% over the 12-year period. This lifted an estimated 496 million people above that poverty line, the World Bank said.
Poverty also declined across non-monetary measures. The poverty rate measured by the Oxford Poverty and Human Development Initiative's Multidimensional Poverty Index fell from 53.8% in 2005–06 to 16.4% in 2019–21. The World Bank's own multidimensional poverty measure stood at 15.5% in 2022–23.
INCOME INEQUALITY: INDIA'S GINI INDEX AT 23
The World Bank put India's Gini index at 23.0 in 2023. The index is used to measure how evenly or unevenly income or consumption is distributed across a population.
It ranges from zero to 100. A score of zero represents perfect equality, where everyone has the same income or consumption. A score of 100 represents the highest possible inequality, where one person has everything and everyone else has nothing.
In simple terms, a lower Gini score indicates a more equal distribution, while a higher score points to greater inequality. India's score of 23 suggests a relatively low measured level of inequality in the distribution captured by the World Bank's measure.
However, this does not mean that everyone earns similar amounts or that the gap between high and low earners is small. The Gini index looks at the overall distribution across the population. It does not simply compare the earnings of the richest and poorest groups.
TOP 10% EARN 13 TIMES MORE THAN BOTTOM 10%, WORLD BANK FINDS
The World Bank's finding on the wage gap highlights the difference in earnings between workers at the two ends of the income distribution.
The report said median earnings among the top 10% of workers were around 13 times those of the bottom 10% in 2023.
In simple terms, if a worker at the median of the bottom 10% earned Rs 1,000, a worker at the median of the top 10% would earn around Rs 13,000. This is an illustration of the ratio, not the actual earnings figures reported by the World Bank.
The comparison is between the median earnings of the two groups. It does not mean that every worker in the top 10% earns exactly 13 times more than every worker in the bottom 10%.
This is why the Gini index and the 13-times wage gap can exist together. The Gini index measures inequality across the overall distribution, while the wage gap compares the median earnings of two specific groups.
The World Bank also cautioned that its household surveys may not fully capture consumption among wealthier households and are likely to understate inequality. This is an important limitation when interpreting the Gini figure.
EMPLOYMENT RISES, BUT REAL EARNINGS REMAIN LARGELY UNCHANGED
The World Bank said India's poverty reduction was mainly driven by strong consumption growth, rising employment, particularly among women, and expanded social transfers, including food subsidies.
Employment increased by around 134 million people between 2017 and 2023, nearly twice the growth in the working-age population. Much of this increase came from rural women entering paid work and adding to the number of earners in households.
However, the report flagged concerns about the quality of employment and earnings. Real earnings remained broadly unchanged, while employment growth was concentrated in relatively low-productivity activities.
Youth unemployment also increased from 14.6% in Q1 FY2026 to 15.9% in Q1 FY2027, particularly among rural young women.
The report also highlighted the uneven geographical spread of poverty. The poverty rate at the $4.20-a-day line stood at 19.3% among the rural population in 2023, compared with 8.6% in urban areas.
Households in a contiguous belt stretching from Uttar Pradesh to West Bengal accounted for around 57% of India's poor population, the World Bank said.